Gold rises in Europe but slips versus the Yen
Gold rose in Monday's European session, closing higher against all major currencies except the Japanese Yen.
The Yen – now suffering a huge "short" position taken out by the world's hedge fund and investment bank speculators – somehow pushed gold 0.14% lower. It also recovered to ¥120 per Dollar, up from ¥122 this time last week.
That move might start to worry the currency traders sitting on a record 173,005 contracts to sell the Yen today. Is there anyone left to sell Japan's currency? (Read more about the Yen's role in today's global finance markets here...)
Large gold traders meanwhile raised their net "long" position by 19% last week, when it broke $661 per ounce for the first time in 7 months.
"Gold has some spillover strength from crude oil," reckons Tom Hartmann, a commodity broker at Altavest Worldwide Trading Inc. in California. Crude oil rose back above $60 per barrel earlier today. Gold added more than $3.50 from its low point just before the New York opening. As London closed, it was trading above $650 per ounce.
Today's rise in gold prices was more pronounced for Sterling and Euro investors, both up 0.6% for the day after the latest economic data from the US helped support the Dollar on the international currency markets.
Gold reached £333 per ounce at one point, trading above €504 for German, French, Italian and Spanish buyers.
In the stock market, Polyus Gold – Russia's largest gold miner – said it raised output by 17% in 2006. Randgold Resources said it plans to match 2006 output this year. A new exploration site in the Philippines was cancelled.
On the demand-side, meanwhile, the Nihon Keizai Shimbun in Tokyo reported today that Japan may soon get a gold ETF, similar to the StreetTracks GLD shares traded in New York.
India is also due to get its first exchange-traded gold fund this month. The world's largest private gold market swallowed up one ounce in every five sold worldwide last year.
What might the Benchmark ETF mean for India's gold demand in 2007? Click here for a full report...